2023 Solar Incentives Guide for Mitchellville, MD - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Mitchellville?

Source: https://www.dsireusa.org/

The phrase "solar incentives" generally refers to financial incentives put in place by solar companies and the government to encourage people to use renewable energy by making solar panels more affordable. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are provided by the Maryland government or your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Mitchellville utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you may be refunded a percentage of the value.
• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. These may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
• Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your home.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a threshold (usually small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a specified percentage of the money you spend installing solar panels.

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.

Your local Mitchellville solar panel installer can provide you with more information about the ITC and how it may apply to your situation.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. Now, solar installation projects that are completed between 2022 and 2032 might qualify for a 30% tax credit. This credit amount will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit might apply to you, talk to your local Mitchellville solar installers.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these might include rebates, tax credits and more. These incentives might be given out by the Maryland government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Mitchellville

Solar energy use nationwide has increased enormously in the past 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from your local utility company, the federal government or the Maryland government. Talking to your local Mitchellville solar panel installation expert is the right first step towards getting the most money possible when you switch to solar energy.